Activision has reported its full year results, as well as its results for the first three months of this year. For the 12 months ending March 31st net revenues were $2.90 billion, almost double the $1.51 billion earned in the previous year. Net income was $344.9 million ($1.10 per diluted share) compared to $85.8 million ($0.28 per diluted share). Not including the increase due to the merger with Vivendi (EPA: VIV), Activision predicts net revenues of $2.75 billion and earnings per diluted share of $0.72 for the next fiscal year. The Nth American market grew 134 percent for the year to $1.762 billion (increasing from 50 percent of the total revenue to 61 percent), while the International market grew 50 percent to $1.136 billion.
During the year Activision had two game franchises cross the $1 billion lifetime sales mark: Guitar Hero and Call of Duty. Other good figures include Guitar Hero III: Legends of Rock being the best-selling game in the US and Europe in dollar terms, and Call of Duty 4: Modern Warfare was the second best-selling game worldwide in units, selling more than 9 millionthe PC version was the best-selling PC title. During the year Activision grew its US marketshare by 7.2 percent to 17.3 percent.
For the three months ending March 31st 2008 Activision had net revenues of $602.5 million, compared to $312.5 million for the same period a year ago. Net income for the quarter was $44.2 million ($0.14 per diluted share), compared to a net loss of $14.4 million (-$0.05 per diluted share) a year ago. Last quarter was "the largest and most profitable non-holiday quarter, even though we did not release any new titles," said Robert Kotick, Chairman and CEO of Activision (NSDQ: ATVI). That's pretty significant considering that a weak product release schedule normally corresponds to poor sales.
Much of the growth in the quarter came from a jump in Nth American sales, which grew from $116 million (37 percent of total revenue) to $367 million (61 percent of total revenue). International revenues grew by 20 percent.
Activision sees downloadable content as a new distribution platform that lets them extend the lifetime of their products. 15 million individual songs have been downloaded for Guitar Hero, and Call of Duty saw more than 1 million related downloads on Xbox Live in the first 9 days.
Activision is also planning online functionality in the final quarter of this year, and expects to defer a lot of net revenues, operating revenues and cost of sales to the following fiscal year. The company is keen on learning from Blizzard (which it will join after the merger with Vivendi), and thinks that Blizzard's brand and experience will help it address online markets, as well as the Korean and Chinese markets.
By James Quintana Pearce